Elon’s town manager has unveiled a proposed budget that would add 5 cents (or 14.3 percent) to the town’s property tax rate in order to cover an anticipated increase in spending that barely exceeds half a percentage point.
Town manager Richard Roedner conceded that this prospective spending plan is still a work in progress when he shared the details with Elon’s town council on Monday.
Roedner added that, as things currently stand, the town’s general fund will need something on the order of $13.9 million to maintain existing services and cover the council’s foremost priorities for the financial cycle that starts on July 1, 2026. He went on to advise the council to limit its allocation of savings to pay for these outlays. He recommended, instead, that the council hike the towns’ property tax rate from 35 to 40 cents for $100 of value – a potential jump of nearly 14.3 percent.
Roedner acknowledged that, in previous years, the town has relied on the general fund’s financial reserves to bankroll far more ambitious spending proposals without the need for such precipitous spikes in the tax rate. He added, however, the town has reached a point where it can no longer depend on its piggy bank to offset other sources of revenue.
“This is not a budget I am pleased with or look forward to finalizing,” he went on to declare in a written report that accompanied his budget presentation on Monday. “However, it is a necessary budget to begin the process of bringing our expectations, and those of our residents, closer to our revenue reality.”
Roedner also unfurled a proposed budget on Monday for the town’s water and sewer system, which relies on service charges to cover the cost of these public utilities. The town manager said he’s recommending a 5-percent hike in these fees due, in part, to an anticipated 4-percent fee increase in Burlington, which provides treated water to Elon while processing the town’s sewer emissions.
As for the town’s general fund, Roedner predicted that a 5-cent bump in the property tax rate will pump an additional $470,000 into this particular account, which takes in various taxes and fees to pay for most of the town’s programs and services. The town manager said that this proposed property tax hike will help offset decreases in other revenue sources – including contributions from the town’s eponymous university, which he acknowledged are no longer as rock-solid as they were in the past.
Roedner conceded that, even with the proceeds from this property tax increase, he is expecting a comparatively lean year for Elon’s municipal government.
The town manager observed that, on balance, his proposed outlays for the general fund are a mere .54 percent higher than its current expenditures. He added that this bump is largely a byproduct of inflationary increases rather than any new services or prospective additions to the town’s staff.
“There’s no new positions in the budget,” he emphasized, “and there’s no increased hours in the budget. We have increased personnel costs by $500,000 in our budget. But this is due to our policies.”
Among Roedner’s “policy”-based hikes is a proposed cost-of-living adjustment of 2.5 percent for the town’s full-time personnel. The town manager has also factored in modest increases in insurance premiums and retirement costs for Elon’s existing staff members.
Roedner went on to recall that many of his budgetary proposals, including his suggested 5-cent tax increase, were originally pitched to the town’s elected leaders during a budget retreat in February. He nevertheless admitted that he made some significant adjustments on the expenditure side of his initial proposal. All told, Roedner said that he has jettisoned about $800,000 in potential outlays, including staffing increases in fire, administration, and public works; an expanded schedule for code enforcement; and a replacement vehicle for the town’s fire department.
One noteworthy addition to Roedner’s initial proposal is a capital outlay for $2 million to revamp a building at 112 Orange Drive that the council recently purchased from LabCorp. The town’s leaders plan to spruce up this 56,000-square-foot structure so it can serve as the future home of Elon’s town hall and its police station
Roedner acknowledged that he has proposed to draw on the general fund’s savings to pay for this seven-figure overhaul of LabCorp’s former facility. The town manager has also earmarked another $1.1 million from these reserves to balance the general fund’s budget.
Roedner insisted that it was with strong reservations that he chose to include this allocation of savings in his proposed spending plan for the general fund. He added that, until fairly recently, it had seemed like the sky was the limit for the financial reserves, or fund balance, connected to this account. He recalled that the fund balance entered a six-year growth spurt in 2018, when its “undesignated” portion totaled about $4 million. This spate continued until 2024 when the undesignated fund balance reached a peak of $11.8 million. Roedner noted that the following year saw these savings slip to $11.6 million. Since then, he said that a series of big-ticket expenditures have done much to deplete the fund’s usable cash.
Roedner admitted that, in the current financial cycle, the council has lightened the general fund balance by about $5.9 million – including an allocation of nearly $2.8 million to cover the aforementioned real estate purchase from LabCorp. He added that these expenditures have brought the undesignated fund balance perilously close to the council’s self-imposed floor of 40 percent of the fund’s annual outlays.
“We are at our threshold for the fund balance in the coming year,” the town manager added. “The one thing I don’t want to do [is to continue using the fund balance], and I’m doing [it] to give you a balanced budget.”
Roedner told the council that, in future years, the town will need to find other ways to cover this $1.1 million allocation in savings in order to avoid a potentially dangerous drop in the fund balance. His appeal was later echoed by Elon’s mayor Emily Sharpe.
“We’ve been pulling from our savings account to pay our bills,” she reminded the rest of the council during Monday’s presentation, “and that’s not sustainable.”
Roedner suggested a handful of changes that he could potentially make to his budget if the council would scale back its use of these reserves. He told the council that he could freeze some staff-level vacancies, although he admitted this move would come at a cost in both service quality and employee burnout. He also alluded to about $300,000 in additional revenue that he could potentially scare up through fee increases and the imposition of new charges.
Roedner proceeded to elaborate on one prospective new fee that Elon’s police chief Kelly Blackwelder had proffered during staff-level budget discussions. Blackwelder had apparently suggested that the town could start charging a parking fee of $2 for the 75 most utilized public parking spaces within easy reach of Elon’s downtown district. Roedner estimated that the imposition of this charge on these now-complimentary spaces could add $150,000 to $200,000 a year to the town’s coffers.
“This is not in the budget,” he added. “But you can see how important this is with where our budget structure is moving.”
The council went on to debate this fee at great length despite the town manager’s assurance that he isn’t recommending it for the next fiscal year. Meanwhile, Sharpe told the rest of the council that she hit the metaphorical brakes when she learned this idea was being bandied about by the town’s staff.
“I did not bring this up,” she went on to profess, “and I told Richard that ‘you’ve got to be kidding’ when it came up [in staff-level discussions].”
